Brookfield Properties has secured draft and design consultancy Cadds Group to the third floor of Perth’s Royal Insurance Building.
The tenant will upgrade and upsize to the 256 square metre office which the landlord was fitting out speculatively.
The initial lease term is five years.
Though the detail hasn’t been disclosed, net rent for this quality in this area asks upwards of $600 per sqm, per annum, ex-incentives.
Cadds is headquartered at Henderson with the Royal Insurance Building tenancy to be its city base replacing 471 Hay Street.
Prominent heritage streetscape
With the Cadds deal, Brookfield has just one of five levels left to fill at the Royal Insurance Building, part of its Brookfield Place project, which also includes a 45 storey tower key tenant BP recently re-committed to until 2037, and 7000 sqm of hospitality and retail (pictured, top).
“Cadds Group was looking to upgrade the quality of its CBD head office accommodation, expand in size and move closer to the core CBD and…major clients,” Colliers leasing agent Grace Bailey said.
“The Royal Insurance Building at 131 St Georges Tce offers just this as it forms part of the largest heritage streetscape heritage on St Georges Tce and is located in the heart of Perth’s CBD within the Brookfield Place precinct,” according to the executive.
“We are continuing to see a strong appetite for high quality fit outs for a majority of small to medium enterprise tenants and demand for those office buildings that provide extra amenity and entice employees to enjoy being part of the office experience when they are in,” she added (story continues below).
According to the Property Council of Australia’s most recent Office Market Report, Perth’s CBD vacancy rate rose slightly from 15.7pc to 15.9pc in the six months to July.
Only Adelaide performed worse, at 17pc.
That said, the Western Australian capital has been experiencing positive net absorption (the overall amount leased by tenants less that vacated).
“Net absorption in the Perth CBD has been positive since July, 2021,” Colliers state Research Manager, Yashwini Halai, said.
“In the six months to July, 2023, there was positive net absorption of 23,950 sqm,” she added.
Net migration is up too, according to the executive.
Western Australia also has the state’s lowest average inflation rate and, for the 12 months to May, set an export record, up 13.8pc.
“These positive indicators have resulted in increasing office demand, positive net take-up and rental growth which will continue to lead a declining vacancy trend moving forward,’ Ms Halai said.
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